Inclusive Green Finance

Outline

1. Introduction to Financial Inclusion2. Inclusive Green Finance3. Digital Financial Inclusion

INTRODUCTION TO FINANCIAL INCLUSION

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“ Financial inclusion means that individuals and businesses have access to useful and affordable financial products and services that meet their needs –transactions, payments, savings, credit and insurance – delivered in a responsible and sustainable way.

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World Bank defines

Elements of Financial Inclusion

Financial Inclusion

Financial Access

Financial Literacy

Financial Identity Digital infrastructure

Consumer security

INCLUSIVE GREEN

FINANCE9

Inclusive Green Finance:Why?

Facts of Climate Change

Climate change has been linked to extreme weather around the globeClimate change threatens the world's food supplyClimate change deepens povertyClimate change poses greater health riskClimate change may result to conflict

Background

- Global efforts are mostly focused on scaling up green finance through the capital market and large scale project finance

- The need to scale down green finance to include low income and MSMEs due to disproportionate impact on poor and vulnerable population

Background

In April, 2019 a global conference organized by Network for Greening the Financial System(NGFS) in Paris acknowledged that

“responding to climate change was within the mandate of the Central Banks and Supervisors”

Inclusive Green Finance

“Inclusive Green Finance is a new and evolving policy area in which Alliance for Financial Inclusion(AFI) member institutions are beginning to devise and implement policies,regulations and national strategies to mitigate or build resilience to sweeping environmental, health,social and economic effects of climate change”

Financial Inclusion as a tool

Savings Credit Insurance

Many studies have shown Financial inclusion as one of the best way to build individual and collective resilience to the effects of climate change

4Ps of Inclusive Green Finance

4P Framework of Inclusive Green Finance

DIGITAL FINANCIAL INCLUSION

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Digital Financial Inclusion

“Involves deployment of the cost-saving digital means to reach currently financially excluded and underserved populations with a range of formal financial services suited to their needs that are responsibly delivered at a cost affordable to customers and sustainable for providers.”

Climate Change & Digital Finance

- Digital Finance is transforming the delivery channels for financial products and services to reach underserved communities efficiently

- Digital Financial Services are driving financial inclusion in rural areas and building resilience to the effect of climate change

Components of digital financial inclusion

Digital platform

Retail agents

Additional financial services

Devices

Benefits

• Access• Lower cost • Tailored Services • Reduced Risk • Empowerment and

economic engagement

Costs

• Novelty Risk• Agent related Risk• Technology Risk• Profit oriented

service providers• Bias in provision of

services (Income class and geographical)

Digital Financial Inclusion

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THANKS!

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Green Bond

Type of financial instrument where the proceeds are invested to finance or refinance in part or full ,new or existing eligible green projects

Green Projects

Projects related to climate change mitigation, climate change adaptation ,natural resource conservation, biodiversity conservation ,and pollution prevention and control

Eligible green project - Renewable energy- Energy efficiency- Pollution prevention and control- Environmental sustainable management of living

natural resources and land use - Terrestrial and aquatic biodiversity conservation - Clean Transportation- Sustainable water and water waste management- Climate change adaptation- Eco-efficient/circular economy adapted products,

production technologies and processes- Green building

Green Bond Principles

Voluntary process guidelines for issuance of green bond:

- Use of proceeds- Process for project evaluation and

selection- Management of proceeds- Reporting

- Use of proceeds